Synopsis:
Some tech workers moving from one firm to another, are beginning to find themselves facing legal action. Companies like Microsoft are employing a mechanism named "inevitable disclosure" which claims that because so-called 'knowledge workers' can't shut off those parts of their brains containing trade secrets and other ephemeral material of interest, violation of non-compete agreements (whether signed or implied by the fact of employment) is inevitable -- even with best faith efforts to prevent spillage. And because inevitable, the employee cannot move, lest darkness fall (needless to say, this concern for preventing idea, aka, 'property' loss will have little effect upon layoff patterns).
This strikes me as an inevitable -- and I'm sure, not unprecedented -- step in the development of 21st century corporate property rights mania. Concerned, more and more, with securing remarkably obscure patents as part of a strategy to create astoundingly broad fiefdoms of ideas -- locked away from public use and only toll accessible -- it was only a matter of time before firms hit upon the notion that present and former employees' thoughts -- at least insofar as they're intermingled with ideas and knowledge their employer owns, a broad category to be sure -- were corporate property.
The great irony of all this (and later, the Digital Rights Management features <http://en.wikipedia.org/wiki/Digital_rights_management> of Microsoft's next version of Windows, Vista <http://news.com.com/2102-1025_3-5844393.html?tag=st.util.print> will slap millions of people upside the head with irony) is that one of the principal mythological underpinnings of Western civ in general and US culture in particular, is the notion of freedom of movement: both of our physical selves and of ideas.
It was, were were told, the bad old Soviets, "Red" Chinese and other slaves of central planning who lived dull, relentlessly monitored lives. Increasingly unchecked corporate freedom it seems, tends to produce more or less the same set of command and control problems the departed systems experienced. Without, it must be said, any of the benefits.
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Legal argument could hamper high-tech job-changers
By Ed Frauenheim
Buried in Microsoft's lawsuit against its former executive Kai-Fu Lee and Google is a legal doctrine that could make tech professionals shiver.
The high-profile dispute largely hinges on a noncompete agreement Lee signed with Microsoft. But in court filings, the software giant has also mentioned the theory of "inevitable disclosure," which holds that in some circumstances people can't avoid sharing or relying on trade secrets from their former employer when moving to a competitor.
Thanks to this increasingly popular legal argument, techies and other employees could be in for a surprise when they try to switch companies. In states that accept the inevitable disclosure concept, employers can sue defectors even if they've signed only a confidentiality agreement--or even if they haven't signed an employment agreement at all, said Robin Meadow, an attorney with the firm Greines Martin Stein & Richland.
Bottom line:
Thanks to this increasingly popular legal argument, defectors might face a lawsuit even if they did not sign agreements not to compete or not to disclose confidential information.
"It's sort of an unwritten noncompete contract, in effect," Meadow said. "The fact that you haven't signed something doesn't mean you're safe when you move to another company."
Chief scientists and engineers at high-tech companies, as well as executives, are particularly vulnerable to the inevitable disclosure argument, according to Martin Foley, an attorney with the law firm Sonnenschein, Nath & Rosenthal. Courts making inevitable disclosure rulings tend to bar a worker from a new position for a year or less, but the concept conceivably could keep someone from taking a new job in their field forever, Foley said.
"Inevitable disclosure is ultimately, potentially, a form of indentured servitude, if it's applied in an extreme manner," Foley said.
A few years ago, Foley himself helped convince a California court of appeals to reject the inevitable disclosure doctrine. But it has been upheld in federal court. Employer suits that call on the inevitable disclosure doctrine are on the rise and now number in the hundreds each year, said Johnny Taylor, partner at the law firm McGuireWoods. It's difficult to say how many state courts have ruled in favor of at least a limited version of inevitable disclosure.
"It's become a trend," said Taylor, also chair of the Society for Human Resource Management professional group. "This theory or doctrine is taking hold."
Microsoft v. Google
The issue has gained renewed attention thanks to a bitter and at times personal legal spat between tech giants Microsoft and Google. After Google hired Lee to run its China operations last month, Microsoft filed suit in a Washington state court claiming Lee was breaking a contract by taking the new position. Coverage of the legally complex case has focused on Microsoft's claim that Lee's new job violates a one-year noncompete clause, which bars him from doing work that would compete with projects he worked on at Microsoft.
But near the end of Microsoft's initial complaint, the company accuses Lee of violating nondisclosure provisions in his contract. In doing so, the software giant calls on the inevitable disclosure theory: "Lee's conduct threatens to disclose or Lee inevitably will disclose Microsoft's trade secrets to Google and/or others for his and/or Google's financial gain in the course of working to improve Google search products that compete with Microsoft, and in the course of establishing and building Google's presence in China to compete with Microsoft's efforts in China."
Microsoft spokeswoman Stacy Drake said the company is not trying to keep Lee, who founded a Microsoft research center in China, from taking his Google post forever. "We are asking that Dr. Lee and Google honor the one-year noncompete/confidentiality agreement that Lee signed with us," Drake said in a statement.
In court documents, Google has called Microsoft's suit a "charade" that's meant to scare Microsoft employees into staying put. Google has claimed that Lee is "not a search expert" and described him as peripheral to Microsoft's business in China--though Microsoft says a document it found in the recycle bin of one of Lee's computers indicates Google anticipated a possible lawsuit in hiring Lee.
Lee has said he has not disclosed any Microsoft secrets to Google, and Google said it has told Lee not to disclose Microsoft's confidences.
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